Clients make transactions at an office of ANZ Vietnam. The bank has received the highest possible foreign currency rating outcome of BB from Fitch Ratings and a BBB- local currency rating – PHOTO: TBTCO

Fitch said that ANZV’s ratings are support driven, claiming that the bank’s parent Australia and New Zealand Banking Group Limited (ANZ, AA-/Negative/aa-) has a strong ability to extend extraordinary support to its Vietnamese subsidiary, given the parent’s credit profile, and ANZV’s small asset base that accounted for only 0.2% of the parent’s total assets at end-2018.

Nevertheless, Fitch analysts stressed that currency transfer and convertibility risks, as reflected in Vietnam’s country ceiling of BB, could represent a significant constraint on ANZV’s ability to receive support from its Australia-based parent.

This is reflected in the support rating of “3,” which indicates a moderate probability of support from its higher-rated Australia-based parent, in times of need.

“Fitch regards the risk of sovereign restrictions on local-currency repayments as lower than that of foreign-currency restrictions. We also expect parental support to be robust, assuming no very-high levels of sovereign or macroeconomic stress. Hence, ANZV’s long-term local-currency IDR is rated two notches above Vietnam’s sovereign rating,” said the agency.

Jodi West, ANZ country head Vietnam, said in a statement on the ANZ website: “Vietnam is an important part of ANZ’s international network and today’s positive rating outcome is a strong affirmation of our well-established business in the country.

“We look forward to continuing to serve our institutional customers in Vietnam and supporting their trade and capital requirements.”

Founded in Vietnam in 1993, ANZV operates as a locally incorporated subsidiary of Australia and New Zealand Banking Group Limited.